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IMF Concludes Armenian Mission On A Positive Note

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  • IMF Concludes Armenian Mission On A Positive Note

    IMF CONCLUDES ARMENIAN MISSION ON A POSITIVE NOTE
    by Venla Sipila

    Global Insight
    March 29, 2012

    An International Monetary Fund (IMF) mission has concluded its visit
    to Armenia, where it conducted discussions for the fourth review of
    its current arrangements with the country. The IMF staff noted that
    Armenian policy performance during the second half of 2011 remained
    well on track in relation to the programme goals. In particular,
    they commended the strengthened fiscal situation; the authorities
    have shown prudence related to borrowing, while a significant
    improvement in tax collection is expected for this year. The Fund
    staff noted considerable progress towards setting the stage for a
    more effective and business-friendly tax administration. They also
    commended the Armenian officials on their progress in formulating a
    tax policy strategy, in further strengthening the inflation targeting
    policy framework, consolidating financial stability and boosting
    the effectiveness of the provision of social services. On the other
    hand, IMF staff also noted that even if the external balances have
    strengthened, both as a result of fiscal restraint as well as strong
    growth of exports and remittances, the current account deficit remains
    wide enough to signal marked vulnerabilities, and thus in need of
    further adjustment. An understanding on a policy framework for 2012 was
    reached, and on the basis of this, a completion of the Fourth Review
    of Armenia's Extended Credit Facility (ECF) and Extended Fund Facility
    (EFF) programmes by the IMF's Executive Board could be expected in May.

    Significance:Approval by the Board would allow for disbursement of
    the fourth tranche of credit, the planned installment of around
    USD56 million bringing total disbursements under the three-year
    arrangement, first approved in June 2010, to USD279 million. The
    IMF completed the third review of the programme in December, when
    a disbursement of around USD56 million had been released. The now
    published staff assessment is encouraging particularly regarding
    progress in tax reform and fiscal administration. Improved fiscal
    management has remained one of key goals throughout Armenia's
    IMF-assisted transition path. Improvement in tax revenue collection
    is crucial for suppressing the size of the shadow economy, as well
    as for creating fiscal means for reducing poverty and encouraging
    private sector business development.



    From: Emil Lazarian | Ararat NewsPress
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